Accounting Policies of Bhuwalka Steel Industries Ltd. Company

Mar 31, 2015

I) Principal Accounting Policies

The Financial statements have been prepared in accordance with applicable Accounting Standards in India.

A summary of important accounting policies, which have been consistently followed, are set out below. The Financial Statements have also been prepared in accordance with relevant presentational requirement of the Companies Act, 2013

ii) General:

a) The accompanying financial statements have been prepared on the Historical cost convention in accordance with the provisions of Companies Act, 2013 and generally accepted accounting principles prevailing in India.

b) The Accounts have been prepared on accrual basis and in accordance with the going concern concept.

c) The company has prepared twelve months financials for the financial year 2014-15 period from 01st April 2014 to 31st March 2015. In previous financial year 2013-14 the company was prepared six months financials from 1st October 2013 to 31st March 2014.

iii) Valuation of Inventories:

Raw materials, Finished goods, Work-in-progress and Stores & Spares are valued at lower of cost or net realisable value except Missrolls and M.S. Scrap which are valued at net realisable value, in accordance with Accounting Standard 2 - valuation of inventories. The cost formula used for this purpose is First in First out (FIFO) method and includes direct cost incurred in bringing the items of inventory to their present location and condition.

iv) Cash Flow Statement:

The cash flow statement is prepared by the indirect method set out in Accounting Standard 3 on Cash Flow Statements.

v) Depreciation :

Depreciation has been provided on straight line method as per the rates prescribed in Schedule XIV to the Companies Act, 1956 on all the assets of the company. Depreciation on the additions made during the year has been provided proportionately for the period of use.

vi) Revenue Recognition:

The company recognises sale of goods as they are dispatched to customers and any significant uncertainty as to its ultimate realisation or collection does not exist. Sales comprise amounts invoiced for goods sold inclusive of excise duty but net of sales tax, returns and trade discounts.

vii) Fixed Assets:

Fixed Assets are stated at their historical cost of acquisition or construction less accumulated depreciation. Cost includes all cost incurred to bring the asset to their present location and condition.

viii) Foreign Currency Transactions:

Foreign currency transactions are accounted for at the exchange rates prevailing at the transaction date. Monetary assets and liabilities outstanding at the year end denominated in Foreign Currency is translated at the year-end closing rates. Gains and/losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities are recognized in the profit and loss account. Exchange differences attributable to the acquisition of the fixed assets, if any, are adjusted to the cost of the respective assets.

ix) Investments:

Investments are classified into current and non current investments. Current investments are stated at the lower of cost and fair value. Non current investments are stated at cost. A provision for diminution is made to recognise a decline, other than temporary, in the value of non current investments.

During the financial year 2014-15 the company has disinvested its total investments in joint venture company Bhuwalka Steel Industries FZC, UAE.

x) Employee benefits:

In accordance with Accounting Standard 15 (Revised) - "Employee Benefits", the Company has:-

1. Accounted short term employee's benefits on accrual basis:

2. Accounted contribution to Employees' benefits contribution plan like Provident Fund and Pension Schemes in line with respective statutes and regulations in force on accrual basis and charged to Profit and Loss Account of the year.

3. Accounted for gratuity, bonus and leave encashment on cash basis instead of accrual basis as per AS 15. As no quantification of provision liability has been done by company from approval actuary/valuer, impact of the same on P&L is not ascertained.

xi) Borrowing cost:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets in accordance with Accounting Standard 16 on Borrowing Costs. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

xii) Segment Information

In terms of Accounting Standard 17, the Company has only one reportable segment viz. Steel. In case of geographical segment, although the company's assets are multi-located, the same are not exposed to risks and returns which are materially different from one another. Further, all of them operate in the same economic environment and subject to similar profitability margins. Hence geographical segment reporting is not applicable.

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Mar 31, 2014

I) Principal Accounting Policies

The Financial statements have been prepared in accordance with applicable Accounting Standards in India. A summary of important accounting policies, which have been consistently followed, are set out below. The Financial Statements have also been prepared in accordance with relevant presentational requirement of the Companies Act, 1956.

ii) General:

a) The accompanying financial statements have been prepared on the Historical Cost convention in accordance with the provisions of Companies Act, 1956 and generally accepted accounting principles prevailing in India.

b) The Accounts have been prepared on accrual basis and in accordance with the going concern concept.

c) The company has prepared six months financials for the financial year 2013-14 period from 01st October 2013 to 31st March 2014. In previous financial year 2012-13 the company has taken permission from ROC to extend the financial year for 18 months period from 1st April 2012 to 30th September 2013. Accordingly financial year was closed on 30th September 2013.

iii) Valuation of Inventories:

Raw materials, Finished goods, Work-in-progress and Stores & Spares are valued at lower of cost or net realisable value except Missrolls and M.S. Scrap which are valued at net realisable value, in accordance with Accounting Standard 2 – valuation of inventories. The cost formula used for this purpose is First in First out (FIFO) method and includes direct cost incurred in bringing the items of inventory to their present location and condition.

iv) Cash Flow Statement:

The cash flow statement is prepared by the indirect method set out in Accounting Standard 3 on Cash Flow Statements.

v) Depreciation :

Depreciation has been provided on straight line method as per the rates prescribed in Schedule XIV to the Companies Act, 1956 on all the assets of the company. Depreciation on the additions made during the year has been provided proportionately for the period of use.

vi) Revenue Recognition:

The company recognises sale of goods as they are dispatched to customers and any significant uncertainty as to its ultimate realisation or collection does not exist. Sales comprise amounts invoiced for goods sold inclusive of excise duty but net of sales tax, returns and trade discounts.

vii) Fixed Assets

Fixed Assets are stated at their historical cost of acquisition or construction less accumulated depreciation. Cost includes all cost incurred to bring the asset to their present location and condition.

viii)Foreign Currency Transactions:

Foreign currency transactions are accounted for at the exchange rates prevailing at the transaction date. Monetary assets and liabilities outstanding at the year end denominated in Foreign Currency is translated at the year-end closing rates. Gains and/losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities are recognized in the profit and loss account. Exchange differences attributable to the acquisition of the fixed assets, if any, are adjusted to the cost of the respective assets.

ix) Investments :

Investments are classified into current and non current investments. Current investments are stated at the lower of cost and fair value. Non current investments are stated at cost. A provision for diminution is made to recognise a decline, other than temporary, in the value of non current investments.

x) Employee benefits:

In accordance with Accounting Standard 15 (Revised) – "Employee Benefits", the Company has:- 1. Accounted short term employee''s benefits on accrual basis:

2. Accounted contribution to Employees'' benefits contribution plan like Provident Fund and Pension Schemes in line with respective statutes and regulations in force on accrual basis and charged to Profit and Loss Account of the year.

3. Accounted for gratuity, bonus and leave encashment on cash basis instead of accrual basis as per AS 15. As no quantification of provision liability has been done by company from approval actuary/valuer, impact of the same on P&L is not ascertained.

xi) Borrowing cost:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets in accordance with Accounting Standard 16 on Borrowing Costs. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

xii) Segment Information

In terms of Accounting Standard 17, the Company has only one reportable segment viz. Steel. In case of geographical segment, although the company''s assets are multi-located, the same are not exposed to risks and returns which are materially different from one another. Further, all of them operate in the same economic environment and subject to similar profitability margins. Hence geographical segment reporting is not applicable.

Xiii) Related Party Disclosure

Related party disclosures have been made in accordance with the accounting Standards on related party Disclosure (AS 18) issued by The Institute of Chartered Accountants of India.

xiv) Accounting Standard 19- Leases

Accounting Standard 19 is applicable only in the case of lease transactions entered into on or after 1st April; 2001.The Company has taken office & residential properties for its employees under cancelable operating lease agreement after 1st April, 2001. The company intends to renew the agreements in the normal course of its business. These properties cannot be subleased to any other person.

Total lease rentals recognized in the Profit & Loss Account for the year with respect to the above is Rs. 28.12 Lacs (Previous Year Rs. 81.57Lacs).

xv) Accounting standard 20- Earning Per Share

Basic earnings per share has been calculated by dividing profit for the year attributable to equity share holders by the weighted average number of equity shares outstanding during the year. The basic earnings per share and diluted earnings per share are the same as there is no change in capital structure in the company.

xvi) TAXATION

During the year company has made provision for tax amounting 19.66/-lacs in accordance with Income Tax Act, 1961.

The deferred tax liability is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable incomes and accounting income that originate in one accounting period and are capable of reversal in one or more subsequent periods. The deferred tax is accounted for, using the tax rates and laws that have been substantively enacted as of the balance sheet date. Deferred tax assets are recognized on unabsorbed depreciation and carry forward of losses as there is virtual certainty that such deferred tax asset can be realized against future taxable profits.

The Company has reversed deferred tax liability amounting to Rs.5,96,05,139/- (Previous year deferred tax liability has provided for Rs. 53,94,996/-) on account of timing difference. Refer Note 21.a for computation of deferred tax liability.

xvii). Accounting Standard 26- Intangible Assets

"Accounting Standard 26 – Intangible assets" requires an enterprise to recognize an intangible asset if future economic benefits are expected to arise from it. It also requires that such an asset should be stated after providing depreciation / amortization over the useful life of the asset. Presently, the reporting enterprise does not own any intangible assets.

xviii. Accounting Standard 28- Impairment of Assets

The Company has identified that there is no material impairment of assets and as such no provision is required as per AS-28 issued by the ICAI.

xix. Accounting standard 29- Contingent Liabilities & Contingent assets

In the opinion of the management, no provision is required against contingent liabilities referred in Note ''23''.

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Sep 30, 2013

I) Principal Accounting Policies

The Financial statements have been prepared in accordance with applicable Accounting Standards in India. A summary of important accounting policies, which have been consistently followed, are set out below. The Financial Statements have also been prepared in accordance with relevant presentational requirement of the Companies Act, 1956.

ii) General:

a) The accompanying financial statements have been prepared on the Historical Cost convention in accordance with the provisions of Companies Act, 1956 and generally accepted accounting principles prevailing in India.

b) The Accounts have been prepared on accrual basis and in accordance with the going concern concept.

c) During the year, the company has undergone financial restructure with the existing lenders under Corporate Debt Restructuring Mechanism.

iii) Valuation of Inventories:

Raw materials, Finished goods, Work-in-progress and Stores & Spares are valued at lower of cost or net realisable value except Mis rolls and M.S. Scrap which are valued at net realisable value, in accordance with Accounting Standard 2-valuation of inventories. The cost formula used for this purpose is First in First out (FIFO) method and includes direct cost incurred in bringing the items of inventory to their present location and condition.

iv) Cash Flow Statement:

The cash flow statement is prepared by the indirect method set out in Accounting Standard 3 on Cash Flow Statements.

v) Depreciation :

Depreciation has been provided on straight line method as per the rates prescribed in Schedule XIV to the Companies Act, 1956 on all the assets of the company. Depreciation on the additions made during the year has been provided proportionately for the period of use. vi) Revenue Recognition:

The company recognises sale of goods as they are dispatched to customers and any significant uncertainty as to its ultimate realisation or collection does not exist. Sales comprise amounts invoiced for goods sold inclusive of excise duty but net of sales tax, returns and trade discounts.

vii) Fixed Assets

Fixed Assets are stated at their historical cost of acquisition or construction lass accumulated depreciation. Cost includes all cost incurred to bring the asset to their present location and condition.

During the year company has sold house property at Indira nagar, Bangalore of Rs 3,90,29,834/-( book Value) For Consideration of Rs. 8,22,00,000/-.

viii) Foreign Currency Transactions:

Foreign currency transactions are accounted for at the exchange rates prevailing at the transaction date. Monetary assets and liabilities outstanding at the year end denominated in Foreign Currency is translated at the year-end closing rates. Gains and/losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities are recognized in the profit and loss account. Exchange differences attributable to the acquisition of the fixed assets, if any, are adjusted to the cost of the respective assets.

ix) Investments :

Investments are classified into current and non current investments. Current investments are stated at the lower of cost and fair value. Non current investments are stated at cost. A provision for diminution is made to recognise a decline, other than temporary, in the value of non current investments.

x) Employee benefits:

In accordance with Accounting Standard 15 (Revised) - "Employee Benefits", the Company has:-

1. Accounted short term employee''s benefits on accrual basis:

2. Accounted contribution to Employees'' benefits contribution plan like Provident Fund and Pension Schemes in line with respective statutes and regulations in force on accrual basis and charged to Profit and Loss Account of the year.

3. Accounted for gratuity, bonus and leave encashment on cash basis instead of accrual basis as per AS 15. As no quantification of provision liability has been done by company from approval actuary/valuer, impact of the same on P&L is not ascertained.

xi) Borrowing cost:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets in accordance with Accounting Standard 16 on Borrowing Costs. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

During the year Interest is not capitalised, as asset had been put to used at the beginning of the previous financial year at Wada Unit 4. (Previous year Rs. Nil Lacs has been Capitalised for Wada Unit 4).

xii) Segment Information

In terms of Accounting Standard 17, the Company has only one reportable segment viz. Steel. In case of geographical segment, although the company''s assets are multi-located, the same are not exposed to risks and returns which are materially different from one another. Further, all of them operate in the same economic environment and subject to similar profitability margins. Hence geographical segment reporting is not applicable.

xiv) Accounting Standard 19- Leases

Accounting Standard 19 is applicable only in the case of lease transactions entered into on or after 1 * April; 2001 .The Company has taken office & residential properties for its employees under cancelable operating lease agreement after 1 * April, 2001. The company intends to renew the agreements in the normal course of its business. These properties cannot be subleased to any other person.

Total lease rentals recognized in the Profit & Loss Account for the year with respect to the above is Rs. 81.57 Lacs (Previous Year Rs. 39.17 Lacs).

xv) Accounting standard 20- Earning Per Share

Basic earnings per share has been calculated by dividing profit for the year attributable to equity share holders by the weighted average number of equity shares outstanding during the year. The basic earnings per share and diluted earnings per share are the same as there is no change in capital structure in the company.

xvi) TAXATION

During the year company has made provision for tax amounting 19.66/-lacs in accordance with Income Tax Act, 1961.

The deferred tax liability is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable incomes and accounting income that originate in one accounting period and are capable of reversal in one or more subsequent periods. The deferred tax is accounted for, using the tax rates and laws that have been substantively enacted as of the balance sheet date.

Deferred tax assets are recognized on unabsorbed depreciation and carry forward of losses as there is virtual certainty that such deferred tax asset can be realized against future taxable profits

The Company has provided deferred tax liability amounting to Rs.53,94,996/- (Previous year deferred tax liability Reversed for Rs. 12,563,978/-) on account of timing difference. Refer Note 21 .a for computation of deferred tax liability.

xxvii). Accounting Standard 26- Intangible Assets

"Accounting Standard 26 - Intangible assets" requires an enterprise to recognize an intangible asset if future economic benefits are expected to arise from it. It also requires that such an asset should be stated after providing depreciation / amortization over the useful life of the asset. Presently, the reporting enterprise does not own any intangible assets.

xviii. Accounting Standard 28- Impairment of Assets

The Company has identified that there is no material impairment of assets and as such no provision is required as per AS-28 issued by the ICAI.

xix. Accounting standard 29- Contingent Liabilities & Contingent assets

In the opinion of the management, no provision is required against contingent liabilities referred in Note ''23''.

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Mar 31, 2012

I) Principal Accounting Policies

The Financial statements have been prepared in accordance with applicable Accounting Standards in India. A summary of important accounting policies, which have been consistently followed, are set out below. The Financial Statements have also been prepared in accordance with relevant presentational requirement of the Companies Act, 1956.

ii) General:

a) The accompanying financial statements have been prepared on the Historical Cost convention in accordance with the provisions of Companies Act, 1956 and generally accepted accounting principles prevailing in India.

b) The Accounts have been prepared on accrual basis and in accordance with the going concern concept.

iii) Valuation of Inventories:

Raw materials, Finished goods, Work-in-progress and Stores & Spares are valued at lower of cost or net realisable value except Mis rolls and M.S. Scrap which are valued at net realisable value, in accordance with Accounting Standard 2 - valuation of inventories. The cost formula used for this purpose is First in First out (FIFO) method and includes direct cost incurred in bringing the items of inventory to their present location and condition.

iv) Cash Flow Statement:

The cash flow statement is prepared by the indirect method set out in Accounting Standard 3 on Cash Flow Statements.

v) Depreciation :

Depreciation has been provided on straight line method as per the rates prescribed in Schedule XIV to the Companies Act, 1956 on all the assets of the company. Depreciation on the additions made during the year has been provided proportionately for the period of use.

vi) Revenue Recognition:

The company recognises sale of goods as they are dispatched to customers and any significant uncertainty as to its ultimate realisation or collection does not exist. Sales comprise amounts invoiced for goods sold inclusive of excise duty but net of sales tax, returns and trade discounts.

vii) Fixed Assets

Fixed Assets are stated at their historical cost of acquisition or construction less accumulated depreciation. Cost includes all cost incurred to bring the asset to their present location and condition.

During the year Company has incurred Rs.154 Lacs (Previous year Rs. 171.87 Lacs) on the expansion of the plant at WADA unit. Total Capital work in progress as on 31-03-2012 is NIL (Previous Year Rs. 499.47 Lacs). Company has capitalized amount of Rs499.47 Lacs in FY 2011-12 related to Unit 4 at Wada from CWIP.

viii) Foreign Currency Transactions:

Foreign currency transactions are accounted for at the exchange rates prevailing at the transaction date. Monetary assets and liabilities outstanding at the year end denominated in Foreign Currency is translated at the year-end closing rates. Gains and/losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities are recognized in the profit and loss account. Exchange differences attributable to the acquisition of the fixed assets, if any, are adjusted to the cost of the respective assets.

ix) Investments :

Investments are classified into current and non current investments. Current investments are stated at the lower of cost and fair value. Non current investments are stated at cost. A provision for diminution is made to recognise a decline, other than temporary, in the value of non current investments.

x) Employee benefits:

In accordance with Accounting Standard 15 (Revised) - "Employee Benefits", the Company has:-

1. Accounted short term employee's benefits on accrual basis:

2. Accounted contribution to Employees' benefits contribution plan like Provident Fund and Pension Schemes in line with respective statutes and regulations in force on accrual basis and charged to Profit and Loss Account of the year.

3. Accounted for gratuity, bonus and leave encashment on cash basis instead of accrual basis as per AS

15. As no quantification of provision liability has been done by company from approval actuary/valuer impact of the same on P&L is not ascertained.

xi) Borrowing cost:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets in accordance with Accounting Standard 16 on Borrowing Costs. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

During the year Interest is not capitalised, As asset had been put to used at the beginning of the financial year at Wada Unit4. (Previous year Rs. 142.25 Lacs has been Capitalised for Wada Unit 4).

xii) Segment Information

In terms of Accounting Standard 17, the Company has only one reportable segment viz. Steel. In case of geographical segment, although the company's assets are multi-located, the same are not exposed to risks and returns which are materially different from one another. Further, all of them operate in the same economic environment and subject to similar profitability margins. Hence geographical segment reporting is not applicable.

xiii) Related Party Disclosure

Related party disclosures have been made in accordance with the accounting Standards on related party ' Disclosure (AS 18) issued by The Institute of Chartered Accountants of India.

xiv) Accounting Standard 19- Leases

Accounting Standard 19 is applicable only in the case of lease transactions entered into on or after 1" April; 2001 .The Company has taken office & residential properties for its employees under cancelable operating lease agreement after 1* April, 2001. The company intends to renew the agreements in the normal course of its business. These properties cannot be subleased to any other person.

Total lease rentals recognized in the Profit & Loss Account for the year with respect to the above is Rs. 39.17 Lacs (Previous Year Rs. 36.74 Lacs).

xv) Accounting standard 20- Earning Per Share

Basic earnings per share has been calculated by dividing profit for the year attributable to equity share holders by the weighted average number of equity shares outstanding during the year. The basic earnings per share and diluted earnings per sh&re are the same as there is no change in capital structure in the company. -

xvi) TAXATION

Provision for current tax is not required as there is loss during the year and accumulated brought forward loss in accordance with Income Tax Act, 1961.

The deferred tax liability is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable incomes and accounting income that originate in one accounting period and are capable of reversal in one or more subsequent periods. The deferred tax is accounted for, using the tax rates and laws that have been substantively enacted as of the balance sheet date.

Deferred tax assets are recognized on unabsorbed depreciation and carry forward of losses as there is virtual certainty that such deferred tax asset can be realised against future taxable profits.

The Company has reversed deferred tax liability amounting to Rs. 1,25,63,978/- (Previous year deferred tax liability provided for Rs. 18729976/-) on account of timing difference. Refer Note 21 .a for computation of deferred tax liability.

xvii). Accounting Standard 26- Intangible Assets "Accounting Standard 26 - Intangible assets" requires an enterprise to recognize an intangible asset if future economic benefits are expected to arise from it. It also requires that such an asset should be stated after providing depreciation / amortization over the useful life of the asset. Presently, the reporting enterprise does not own any intangible assets.

xviii. Accounting Standard 28- Impairment of Assets The Company has identified that there is no material impairment of assets and as such no provision is required as per AS-28 issued by the ICAI.

xix. Accounting standard 29- Contingent Liabilities & Contingent assets In the opinion of the management, no provision is required against contingent liabilities referred in Note "23".

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Mar 31, 2011

I) Principal Accounting Policies:

The Financial statements have been prepared in accordance with applicable Accounting Standards in India. A summary of important accounting policies, which have been consistently followed, are set out below. The Financial Statements have also been prepared in accordance with relevant presentational requirement of the Companies Act, 1956.

ii) General:

a) The accompanying financial statements have been prepared on the Historical Cost convention in accordance with the provisions of Companies Act, 1956 and generally accepted accounting principles prevailing in India.

b) The Accounts have been prepared on accrual basis and in accordance with the going concern concept.

iii) Valuation of Inventories:

Raw materials, Finished goods, Work-in-progress and Stores & Spares are valued at lower of cost or net realisable value except Mis rolls and M.S. Scrap which are valued at net realisable value, in accordance with Accounting Standard 2 – valuation of inventories. The cost formula used for this purpose is First in First out (FIFO) method and includes direct cost incurred in bringing the items of inventory to their present location and condition.

iv) Cash Flow Statement:

The cash flow statement is prepared by the indirect method set out in Accounting Standard 3 on Cash Flow Statements.

v) Depreciation:

Depreciation has been provided on straight line method as per the rates prescribed in Schedule XIV to the Companies Act, 1956 on all the assets of the company. Depreciation on the additions made during the year has been provided proportionately for the period of use.

vi) Revenue Recognition:

The company recognises sale of goods as they are dispatched to customers and any significant uncertainty as to its ultimate realisation or collection does not exist. Sales comprise amounts invoiced for goods sold inclusive of excise duty but net of sales tax, returns and trade discounts.

vii) Fixed Assets:

Fixed Assets are stated at their historical cost of acquisition or construction less accumulated depreciation. Cost includes all cost incurred to bring the asset to their present location and condition.

During the year Company has incurred Rs. 171.87 Lacs (Previous year Rs.559.42 Lacs) on the expansion of the plant at WADA unit and the same has been shown as Capital Work in progress (CWIP). Total Capital work in progress as on 31-03-2011 is Rs. 499.47 Lacs (Previous Year Rs. 3951.60 Lacs). Company has capitalized amount of Rs. 3808.93 Lacs in FY 2010-11 related to Unit 4 at Wada from CWIP.

viii) Foreign Currency Transactions:

Foreign currency transactions are accounted for at the exchange rates prevailing at the transaction date. Monetary assets and liabilities outstanding at the year end denominated in Foreign Currency is translated at the year-end closing rates. Gains and/losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities are recognized in the profit and loss account. Exchange differences attributable to the acquisition of the fixed assets, if any, are adjusted to the cost of the respective assets.

ix) Investments :

Investments are classified into current and long-term investments. Current investments are stated at the lower of cost and fair value. Long-term investments are stated at cost. A provision for diminution is made to recognize a decline, other than temporary, in the value of long term investments.

x) Employee benefits:

In accordance with Accounting Standard 15 (Revised) – "Employee Benefits", the Company has:- 1. Accounted short term employee's benefits on accrual basis:

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Mar 31, 2010

I) Principal Accounting Policies:

The Financial statements have been prepared in accordance with applicable Accounting Standards in India. A summary of important accounting policies, which have been consistently followed, are set out below. The Financial Statements have also been prepared in accordance with relevant presentational requirement of the Companies Act, 1956.

ii) General:

a) The accompanying financial statements have been prepared on the Historical Cost convention in accordance with the provisions of Companies Act, 1956 and generally accepted accounting principles prevailing in India.

b) The Accounts have been prepared on accrual basis and in accordance with the going concern concept.

iii) Valuation of Inventories:

Raw materials, finished Goods,work-in-progress and stores & spares are valued at lower of cost or net realisable value except Misrolls and M.S. Scrap which are valued at net realisable value, in accordance with Accounting Standard 2 - valuation of inventories. The cost formula used for this purpose is First in First out (FIFO) method and includes direct cost incurred in bringing the items of inventory to their present location and condition.

iv) Cash Flow Statement:

The cash flow statement is prepared by the indirect method set out in Accounting Standard 3 on Cash Flow Statements.

v) Depreciation :

Depreciation has been provided on straight line method as per the rates prescribed in Schedule XIV to the Companies Act, 1956 on all the assets of the company. Depreciation on the additions made during the year has been provided proportionately for the period of use.

vi) Revenue Recognition:

The company recognises sale of goods as they are dispatched to customers and any significant uncertainty as to its ultimate realisation or collection does not exist. Sales comprise amounts invoiced for goods sold inclusive of excise duty but net of sales tax, returns and trade discount.

vii) Fixed Assets

Fixed Assets are stated at their historical cost of acquisition or construction less accumulated depreciation. Cost includes all cost incurred to bring the asset to their present location and condition.

During the year Company has incurred Rs.559.42 lacs (Previous year 1752.24 lacs) on the expansion of the plant at WADA unit and the same as been shown as Capital Work in progress. Total Capital work in progress as on 31-03-2010 is Rs.3951.60 lacs (Previous year 3389.17 lacs).

viii) Foreign Currency Transactions:

Foreign currency transactions are accounted for at the exchange rates prevailing at the transaction date. Monetary assets and liabilities outstanding at the year end denominated in Foreign Currency is translated at the year-end closing rates. Gains and/losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities are recognised in the profit and loss account. Exchange differences attributable to the acquisition of the fixed assets, if any, are adjusted to the cost of the respective assets.

ix) Investments.

Investments are classified into current and long-term investments. Current investments are stated at the lower of cost and fair value. Long-term investments are stated at cost. A provision for diminution is made to recognize a decline, other than temporary, in the value of long term investments.

x) Employee benefits:

In accordance with Accounting Standard 15 (Revised) - "Employee Benefis", the Company has :-

1) Accounted short term employees benefits on accrual basis:

2) Accounted contribution to Employees benefits contribution plan like Provident Fund and Pension Schemes in line with respective statutes and regulations in force on accrual basis and charged to Profit and Loss Account of the year.

3) Accounted for gratuity and leave encashment on cash basis. The gratuity amounting to Rs.9.77 lacs not provided during the year

xi) Borrowing cost:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets in accordance with Accounting Standard 16 on Borrowing Costs. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

During the year interest amounting to Rs.206.99 lacs (Previous year Rs. 165.82 lacs) has been Capitalised i and shown under Capital work in progress

xii) Segment Information:

In terms of Accounting Standard 17, the Company has only one reportable segment viz. Steel. Incase of geographical segment, although the companys assets are multi-located, the same are not exposed to risks and returns which are materially different from one another. Further, all of them operate in the same economic environment and subject to similar profitability margins. Hence geographical segment reporting is not applicable.

xiii) Related Party Disclosure:

Related party disclosures have been made in accordance with the accounting Standards on related party-Disclosure (AS 18) issued by The Institute of Chartered Accountants of India